Ethics question regarding buying at auctions...
 

So Im tempted to do this and wonder others opinions on the matter.

My father and I collect little in common but when there is the occasional conflict of interest with an auction on the bay we never bid against each other. I guess there's no formula to who bids on it, but one of us just pulls out of the running...thats not the issue.

In the past year or so I have met quite a few guys that collect exactly the same thing I do. Do you consider ethical form to contact these guys in the first place, prior to auctions ending, and arrange a little priority on who might lay off on some bidding when these exact items end? My debate is if that puts these collectors in a potentially awkward position? Yes they can decline, but Id rather not do it in the first place if its generally viewed as bad form. How about towards the seller? Does it matter who is doing the auctioning? Generally these auctions see 10 bidders and I may take out 2-3 bidders, so does the number matter? And then there's my own agenda trying to get cards. Im thinking this is bad form, but I would never bid against my father so is that the line?

Thoughts and don't go at me too hard as I am asking before any action has been taken. Most of my bb card world is this computer with very little person-to-person contact.

Thanks.

It's not uncommon for friends- or fathers and sons- to agree not to bid against each other on an auction lot. It probably won't make a big difference because there likely will be other bidders who will take the lot pretty close to its retail level.

Of course there is another side to it too. How would you feel if you were a consignor, and you overheard two people agreeing not to go head to head on your lot in order to keep the price down. My guess is you wouldn't be very happy about it.

So even though it goes on all the time, and I know I have over the years agreed on occasion not to bid, there is an ethical breach here.

There are people at local auctions that know I collect Lincoln minor league baseball items and they do not bid against me. Sometimes I get the stuff for the opening bid and sometimes I go against someone that I don't know and pay more for it. I know that I lay off bidding against guys on certain items that I know they collect and are not looking to flip. Pretty much an unwritten rule at auctions between the regular crowd.

That's cool that you and your Dad have this hobby in common.

I have had collectors 'fish' around with email and PM when they see a card appear that they think I might plan to bid on. If I want the card, I must admit - I'm evasive or non responsive. I have this happen with rare pool cues as well. Same deal - if it's something I want and I know they want it as well, I just practice avoidance. If it's someone who I know will spend an arm and a leg, then we start a dialogue, I wish them well, and I don't bid. I have no desire to run up the price on a friend. On the other hand, it might be a friend selling it.

If you can arrive at a bidding agreement with such a people, I don't see the problem - as Dan said, most of us avoid buying things to flip if we think someone who really collects that item is interested in it. An example is the 'scrap' (misfit) cards that show up every now and then. I know Johnny, Chris, Jantz, etc., are very interested in these things. I won't even bid on them unless it's for my personal collection - I would hate to run things up on one of them, given how much they contribute to researching T206 history/production. It's just sort of an unwritten rule.

I have expressed my feelings before, some agree, some don't, I don't see anything wrong with fellow collectors "stepping aside" for each other on a particular card that is needed. I am aware of the "consignor" argument and I mostly buy cards although I do sell some, mostly duplicates or from sets I no longer am thrilled about, but I still feel there is nothing wrong with collectors helping each other this way. I will go one step further, I don't see a problem with collectors going together to buy a set or large lot and have a plan to divide up the winning cards. I have purchased sets before just to obtain a handful of cards and then sold the rest on BST or ebay, card by card and have also gone in with a group of collectors who might need a type card or a team card or just a couple for their set. There is always the argument that this lowers the final purchase price and hurts consignors but in actuality, there have been a few sets that none of us could afford but we could be vigorous bidders when we come together. The final price was driven up because of the group's bidding...
Just my 2 cents....

Nothing unethical about what you are proposing. In the glory days of eBay (when you could see the other persons id), stuff like you suggested would occasionally happen. But at the end of the day, it would almost be impossible to get a bunch of prewar junkies to actually agree beforehand on what cards they could bid on.

By the way, I'm all "in" on the elimination of a few bidders. Do you need any names???

Lovely Day...

Ethics is often about good or bad intentions.

If a group of friends pools their resources to buy a lot because none of them can afford it otherwise and most only need a few cards, then even if it lowers the final price there is nothing wrong with it.

On the other hand, if a group of dealers conspires to depress prices by never bidding against each other, then that is unethical, not to mention illegal.

There is a gray area here, no doubt.

An agreement to step-aside and allow another to win an auction is called collusion and is definitely illegal in that it artificially lowers the price.

I don't think this applies to most of the courtesy withdrawals previously mentioned.

Im appreciative of all these well-thought responses to the situation. Im in the gray....

Steven, we used to have a regular chat in the evenings, and we were all the time talking about various lots and making deals as to who would bid on what. And like others mentioned, many of us have gone in together on lots, with one person doing the bidding. I doubt it had much effect on the final price, as none of us were wealthy guys who were interested in paying too much;i.e-if we had been bidding separately, we still wouldn't have gone over market value. I remember getting a very tough common as part of such a group-bid effort, when there were some super-expensive cards in the lot that made it prohibitive for me to bid. In that case, I think our 'collusion' might have actually introduced three bidders into that lot who would otherwise not have participated.

If you're doing this w/ a relative, ok. But, if you're approaching basically a stranger and essentially saying, "I'd appreicate it if you didn't bid on this lot becuz I want it more than you do," that's not a question of ethics, but arrogance. Bad form!

for me
 

I have gone in on lots before and have not bid because I knew a friend was going for a set or needed the card badly for his collection. That being said I very rarely discuss what I am bidding on anymore because the few type collectors and myself usually want the same thing. By discussing it, it makes me feel I shouldn't bid. So I don't talk about them beforehand. Very good friends and I butt heads in auctions all of the time. That's what happens with passionate collectors. Not a big deal. Just like on Storage Wars, whoever has the most money in their pocket can buy the cards. I just need more money in my pocket!!

Yeah, Im more in the middle with guys Ive bought and sold cards with for about a year now. Not a relative, but also not a stranger. The stranger seems like it would fall into that "illegal" category...definitely bad form.

Okay, I'll risk getting a reaming....If I know someone on the board collects a rare item, I know he is willing to 'over-spend' for it, and I see such an item come up in a major auction....I have a few choices: 1) I hope he doesn't see it 2) I assume he sees it and I can either give up immediately and alert him to the item, or 3) I can try to outbid him, knowing one of us will pay way above market value, or 4) I contact him in advance and try to come to some sort of arrangement so that the bidding doesn't get out of hand, or 5) he contacts me and I ignore him or brush him off.

If I choose option 4, is that wrong? Personally, I would never do it, but I HAVE had other collectors approach me (option 5), trying to figure out where I stand on a particular item. I generally try to tactfully brush them off.

I do this sometimes and it is not collusion because you cant control the other 100 million people on ebay, but it is a nice gesture between friends in a small collecting niche and even if you get outbid or the price goes for what it normally would anyways, at least you know you and your buddies have each others collecting interests in mind.

To me it is no different than seeing a T206 that is underpriced at a show, but that you might already have but know a friend of yours needs. Instead of buying it and raising the price to your friend, you alert your firend to let them buy it and save them some money. Maybe apples and Oranges but thats how I see it.

Situation 1 - ok
situation 2 - Actaully a nice thing to do.
situation 3 - ok
situation 4 - Very not ok. See below.
Situation 5 - Hard to tell. I've asked a friend about an item I was interested in and found out how much he'd already bid. Out of my league so I didn't bother bidding, but not as an arrangement, just something I did. I've been asked and have openly told friends my max bid or what I thought of an item. What they decide to do is up to them.

The stuff about how #4 can go very wrong- Unlikely anyone would pursue it on an occasional cheap item, but it still shouldn't be done.

http://www.jamesmccusker.com/news/article.cfm?id=234

http://www.ag.ny.gov/media_center/20...apr21a_04.html

Steve B

Scott - Thank you for the comments. I appreciate that.:)

I see nothing wrong with giving a fellow board member a "heads up" about a certain card. No need to get into a bidding war with a friend.

In the past, I have contacted other board members quite frequently, but not always. I can't let Johnny get all those freak T206s! :p Either way, most of the board members I've contacted are strong bidders and so am I if we want the card for our collection. So I can't imagine the sellers being to unhappy about about the final price.

Does communication between perspective buyers affect a card's final price? I'm sure it does. Sometimes for the good and sometimes for the bad. In the end, there are alot of other factors involved.



Jantz

One of my favorite hobby moments was back a bunch of years when I joined forces with another (asshat and a half) collector on a near set of D359's. I backed off bidding allowing other person to win, as we had a verbal agreement to split up the lot, as niether needed all the cards.
The lot went for a few grand less than what either of us was willing to top out at...I was thrilled.
Next day the other guy turns around and says he needs to double the price/cost of the cards I thought were coming my way. He said he had realized what a great deal he was getting andf went ahead and bid aggressively on a few other lots and won them, so now he needed me to help him cover those costs.
I almost got in my truck and drove down to Poughkeepsie to pound him flat.

....your results may differ.

Speaking from an auctioneer's standpoint there are no friends at an auction!!! That is the ideal situation for us sister against sister and brother against brother tooth and nail and believe me this happens. We understand the feeling of not bidding up friends and family, but to engage in a ring and try to repress the prices of an auction is illegal it is not a gray area at all.

I also find it funny that there is so much talk about auction house ethics on here, but when it comes to being a bidder anything goes. Funny double standard.

One local live antique auction I went to there were two guys in the front row competing for the same lot. At one point one turned to the other and asked "do you want to stop now and split it"

The auctioneer stopped the bidding chastised tham for saying that in front of him, because at that point it wasn't going in on lot together, but a collusion. Then he restarted the bidding.

Pooling resources is fine, doing it during the bidding with a competitor isn't.

(Neither of them won, two other bidders came in slightly above where they were.)

Steve B

but to engage in a ring and try to repress the prices of an auction is illegal it is not a gray area at all.

Yeah, we all know what high regard for the law auction houses preying on this "hobby" have had over the past 15 years. You make me laugh.

Seen it happen once at a live auction...a woman said I'll split the lot with you if you stop bidding and the auctioneer stopped and told her she just broke the law and if she wanted to continue at the auction she won't do that again. You could see the embarrassment on her face...she must have left shortly after because I didn't see her again after that.

Sometimes when collectors don't communicate it hurts the final sale price for the seller/auction house too.

It happened last week on Ebay.



Jantz

James- I think you are missing the point. I understand collusion and price-fixing, etc. but the following real example illustrates the concept of "apples and oranges" in discussing collectors getting together to buy an auction lot. 8 collectors who would all like between 1 (for a type) and 2-5 cards (for set collectors) decide to pool resources on bidding on a caramel set containing 30 cards. On of the collectors is designated as the bidder, the others watch and keep their fingers crossed. None of the 8 collectors would be able to afford the mid to high grade set but by pooling their resources, "they" become a serious and tenacious bidder. During the final hour of bidding, "they" bid 4 or 5 times, driving the bid amount up and up. Had it not been for the collective bidding, the lot would have sold to another bidder, also tenacious, for quite a bit less. The consignor profited, the auction house profited, the bidders profited because the cards were seldom seen for sale in their condition and they were able to secure cards they needed. The 8 card collectors who communicated about the cards with each other formed bonds of friendship which lasted long after the auction ended and several have traded or sold cards to each other.
The goal was not to depress or "fix" the final price, the goal was to secure cards.
Apples and oranges....

+1

I also agree that if a large lot of cards is too expensive for any number of collectors to afford, but by pooling their resources they are at least able to competitively bid on it, then they have done absolutely nothing wrong. Their goal was to get the cards, and this may have been their only opportunity to do so.

That is much different than collusion. That is done for the sole purpose of depressing the final price on the lot.

This is a question that everyone has to answer for them self. Everyone has to decide what is and what is not ethical to them. Legal or not. Way back in the dark ages I had a graduate business ethics class. It was probably the best class I ever took. It was not about tell us what was ethical but for us to figure out exactly what our ethics where and sticking with them through out our life. People will respect others that are not sitting on a fence. Everyone here will have different ethics, which makes for a lot of disagreements. LOL and fun reading.

Tbob I agree pooling resources namely finances hurts no one and brings another bidder to the table. That is not collusion. Collusion begins when a group gets together and agrees that I will only bid on these and you will only bid on those.

Murcerfan nobody is preying on you. You are a grownup and you can spend your money any way you like. You are not forced to bid at auction. Many people still buy face to face or trade. I do not think every auction house is ethical, but by no means will I ever believe that they are all crooked. Let's face it we can operate totally within the law and be totally transparent and someone based on their own individual beliefs now perceives us as being crooked and the mindless mob follows along. Next thing you know a reputable house can get a bad name. I know 2 auction houses in my neighborhood that sell hundreds of fake autographs at time. I vote with my feet and stay totally clear of their buildings. I do not even want to be seen in association with them. As far as making you laugh I am glad that I was able to bring you some entertainment.

OK, thanks for setting me straight.

I'm pretty new to all this.